The BioMar Group, from Aarhus in Denmark, has entered into a Memorandum of Understanding with the Chinese Tongwei Co. Ltd to establish a Joint Venture dedicated to producing and selling high performance feed for aquaculture in China. Their target iss to become one of the leading suppliers of high performance feed to the Chinese aquaculture sector and in a second step to expand further to other Asian markets.
BioMar is a aquaculture industry feed supplier, while Tongwei is a leading Chinese feed producer operating also in Southeast Asia.
The MOU means that the two companies have agreed to start building a feed factory with an annual capacity over 100,000 metric tons in China, scheduled to start operation in 2016. In the next stage BioMar and Tongwei target to expand with 3‐5 new factories of a similar or larger scale in China and to expand with production and sales in other countries in Asia.
BioMar’s entry into the Chinese market is according to the CEO of the BioMar Group, Carlos Diaz, a part of a global expansion strategy initiated a few years back with the establishment of a feed production unit in Costa Rica and which most recently has resulted in the construction of a new factory in Turkey.
The joint venture partners complement each other extremely well in terms of product ranges and market access, thinks the CEO: “China is the world largest aquaculture market and Tongwei holds the leading position as a feed supplier to the aquaculture industry in China. BioMar will as a leading global supplier of specialized larval and fry diets as well as high performance grower diets and functional feeds contribute with know-how and product ranges for the fast growing production of high value fish species in China.”
The product range for the new Joint Venture factory will include starter and grower feeds for marine and fresh water species such as sea bass, sea bream, cobia, turbot, bass, grouper, trout, sturgeon, tilapia, eel, and shrimp.
While BioMar will directly apply feed recipes and product ranges for some species, Carlos Diaz underlines that BioMar also brings a well proven approach in product development securing highly efficient, safe, and sustainable diets: “We have in the salmon segment as well as in other species built a model for feed development, which will be of great value in the development of feed for the new species which are gaining importance in aquaculture across Southeast Asia.”
Lack of clean water has been highlighted as one of the greatest challenges for the expansion plans of this joint venture. In reply to this Asia Carlos Diaz points to another key strength of BioMar: “In this scenario BioMar can contribute with a huge amount of knowledge in environmental management, reduction of emissions from aquaculture to the aquatic environment, and especially with highly specialized diets developed for intensive fish production in recirculation aquaculture systems with very limited water consumption. BioMar has over the years through a proactive research effort and collaboration with farmers, authorities, and research institutions achieved a leading position in this field. This knowledge will be very important in the future development of aquaculture in China as well as the rest of Asia,” he said.
BioMar and Tongwei will each hold 50% of the new Joint Venture.
Tongwei Co. Ltd operates nationwide in China as well as in Southeast Asia with over 100 branches and subsidiary companies. In 2014 Tongwei produced around 4,000,000 tons of feed of which 2,500,000 tons were aquaculture feeds. This makes Tongwei the world’s largest aquafeed manufacturer as well as a major livestock and poultry feed producer. It has held the leading position in the Chinese aquafeed industry for the last consecutive 22 years and it is continuing a rapid expansion within aquaculture research, aquaculture, animal health care, and food processing. The annual sales revenue of Tongwei is exceeding RMB 10 billion.
Founded in Denmark in 1962, the BioMar Group A/S is a leading supplier of feed to the aquaculture industry, ranking among the top three suppliers in the field of high performance feed worldwide. Currently BioMar has 11 production facilities, producing feed for more than 30 different species including among others salmon, trout, sea bass, sea bream, eel, tilapia, shrimp, and sturgeon. BioMar feeds are sold to more than 60 countries and a new factory is at present being built in Turkey. In 2014, the sales volume of BioMar was close to 1,000,000 tons with a turnover around 1.1 billion Euro. BioMar is fully owned by Danish Schouw & Co listed at the Nasdaq Copenhagen stock exchange.